The Ramsey Show - App - My Husband and I Can’t Seem To Get on the Same Page (Hour 3)

Episode Date: May 31, 2024

Coming to you live, this is the Ramsey Show, where we help you win in your life, win with your money, win in your work, and win with your relationships. 888-825-5225 is the phone number. 888-825-5225. I'm Ken Coleman. He is George Camel, our money guru and expert. I'll weigh in on some of that. How about some people out there, George, you were telling me

during the break. They're struggling. They're not making the money they want to make. Maybe they feel they've been passed over. Maybe they've hit their lid. Maybe they feel like they're in an industry or a job where they're just not going to be able to make the money they want. Those kind of calls. I get a lot of comments in DMs and people are going, I don't understand the numbers you're saying.

I make $30 or $40. How do people make $50, $60, $70, $80, $100 plus? We get these questions all the time and we can show the numbers you're saying. I make $30,000 or $40,000. How do people make $50,000, $60,000, $70,000, $80,000, $100,000 plus? And we get these questions all the time. And we can show you if you're looking to get more education to make more money. Ken can help with that. Maybe you're thinking, should I move because my commute's too long? We took a call about that last hour. All of that plays into your real life.

So call us up with that. If you've got a question about how you can make more money, that's what I'm here for. And George has got some good thoughts on that too. So it's a pretty good combo. Making more money, keeping more money. That's what we are. Growing that money that you make. That's a piece of it. That's you too. Making the most of your money. That's what I help with. Now you're bragging. Now you're bragging. It's braggadocious. That's nice. Let's go to Micah in Detroit. Micah, how can we help? Hey, how you guys doing? We're having fun.

What's going on? Not too much. Yeah, I've been listening to you guys for a few months. Unfortunately, I was allowed to make financial decisions before I started listening to you guys. So I'm coming to you. It's usually how it goes. You make the mistakes and you go, I should probably not do this. Let me go find a show. No judgment, though.

Exactly. I appreciate that. Yes, my situation. I, last year, went into a fitness, opened up a gym with a friend of mine, and he agreed to cover the finances on the gym. And I agreed that I would be the sweat equity via the person working the ground. And so his financial decision was to take out a personal loan to fund this gym, which at the time I didn't really know too much about. So I was just like, sure, yeah, go ahead and do it.

And I agreed to kind of let that loan be a part of our business's monthly expenses. So essentially we were splitting the cost of it with the gym revenue. Since we haven't made a profit on this gym yet, like all the money continues to come out of his pocket to cover the business loan or the personal loan each month. And he wants that once we start making a profit that I would, you know, see some of the profits to him to pay back the losses that were supposed to be a part of the expenses,

which I feel like doesn't really take into account the, like the sweat equity that I put in and the amount that that has really impacted my family financially. And so kind of the, the question I have right now is do I, do I, do I stay without pay working the hours on this thing and trying to find a way for it to profit?

And then I'll figure out how to make hands meet with whatever he's put in because of that personal loan. No, no. I'm not even going to wait for the rest of that sentence. That's a horrible idea. Yeah, I agree. Okay. So how much money are we talking?

So it was a $250,000 personal loan. He had 15% interest on it. Goodness gracious. Yeah, right. I've learned how terrible that is. Has the balance grown? Or you mean like how much has it to be owed on it? Yeah, at 15% interest, has it grown?

Is it now $260,000, $270,000? So I guess now it is officially back to, it's finally under $250,000. We've been paying it back since January of 2023. So about $4,800 a month comes out to pay that thing. And you guys, what's the revenue of the gym? We're about $20,000 right now for a month. And are you getting paid at all? I thought I heard you saying you're not being paid.

I don't get paid a penny. Does he get paid? No, because any margin that we have, our expenses are a little bit more, mainly because of the – well, the loan is the thing that keeps us that. We haven't broken even yet. So we'll put money into it based on what that difference is. So your expenses are how much per month, including the debt, all overhead, labor? Yeah, including the loan, it's about, it's $23,000 to $24,000 a month, depending on,

yeah, the hours the coaches work. What is the solution here? I mean, you have to be making, you know, $30,000, $40,000 a month just to pay yourselves and cover the expenses. Right. Yes. I mean, the gym, I mean, it's still growing in revenue, not as fast as we want to. We kind of, I mean, that's, yeah, that's what I'm kind of trying to figure out. I mean, the solutions on the gym itself

in terms of making revenue is something that we have support and different mentors from the gym franchise that help us out. The solution on the personal problems with it are tough because I don't really bring any money home to my family. How are you living? Yeah.

Is your wife working full time? She, she does now. She, she, she had a remote job and she really likes. And for me, I usually,

after my gym hours, we'll just drive Uber, you know, to try to make some money for our family. Is your wife not very angry at this whole situation that you put your family in? Yeah, she's thankfully very supportive. Our marriage is really good, but I think both of us are pretty mad at the situation that I put us in. Yeah.

Even if you, let's say you closed up shop today you guys still owe 250 000 together exactly so you still owe 125 just to walk away well i have actually read a technical question there your business partner is the one that took out the loan is your name on this nope so you don't your name is not on this deal correct and and and this was the deal going in he was going to do the the the financing and you were going to do the sweat equity, which is I'm guessing you're running the gym, right? Yes. So it sounds like he was sort of the investor here who took on the risk financially to make this happen. Now, he could come after you in court and fight you forever to get this money back, but legally—

Can he? Oh, yeah. I mean, he could say this was a business partnership. Wait a second. Wait a second. Did you sign anything? We... Well, yeah, we have a partnership agreement.

It's a very poorly written partnership agreement. So he had one of his lawyers that kind of mustered it up together that we signed. He said that we were both responsible for the losses on the gym. If ever it had to close and we didn't have any. I never defined... that we signed. He said that we were both responsible for the losses on the gym. If ever I had to close and we didn't have any. I've had someone look at it. They said, I never defined any losses, just as losses, which he defines as financial losses. I would define as

the losses I've taken because of the fact that I've worked hours without being able to provide. I appreciate what you're saying, George. Step in here if I'm saying the wrong thing or you disagree. I'm not worried about the legal piece of this. I'm worried about the financial for you, and you've already put in enough sweat equity. This thing sounds like it went from a dream to a nightmare pretty quickly. Is that true? It doesn't sound like six months from now, you're paying yourselves and this debt's getting knocked out. Yeah, this is the problem with starting a business like this. It is a full-blown risk. And the only way to win in this is you get more people that are paying to be a part of this gym.

And it's not worth you starving emotionally because that's what this is. Thank God your wife's got a good job. But this time to fold, man. And there's two lessons here for folks listening. Number one, we never recommend partnerships. It's the only kind of ship that usually sinks. And then number two, we never recommend starting a business by using debt. And so two hard lessons to learn here. The only way to try to make this happen is stick it out for a little while longer and see if you can get revenues up and expenses down. That's how profits are created.

I'm only okay with that if, Micah, you are putting less sweat in there, right? So maybe you're only spending five hours a day at the gym and you're spending, you know, I don't know. You've got to make some more money. I think you guys need to reassess and have a hard conversation about what the future of this looks like. I'd want out of this partnership. I would be getting out.

Sorry, man. Man, I need to do some push-ups. That was a very stressful call. No pun intended. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer,

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Hi, I have a question about getting my husband and I on the same page. So I've been earning the finances for our household ever since we got married. We've been married for five years, coming up in July. And we went through financial peace, and I think we went through all nine classes at a church and he seemed to be on board. We did our budgeting for a little bit together and then we just kind of, he didn't, he didn't like the way I was budgeting because I was extremely detailed and had a million different categories and he just wasn't really excited about it. So now he just doesn't even want to look at the budget. It just stresses him out. What he wants to know is what's coming out for the bills, what's coming out for spending, and that's it. Well, that doesn't sound... So you're the nerd. He's a little more free spirit. He doesn't want to dig into the details.

That's okay. That's a normal marriage. Yeah. So it's not about being on the same page about do you like my budget line item it's are we on the same page about where we're going financially which feels like he is isn't he brooke yeah i would say so um he does want to pay off debt we've had a some personal uh loans for like family that we've had for a while like a thousand dollars of that and um i want to get those knocked out like we've had them since we've been married. Yeah, I get it. But here's what I'm hearing. Let me, let me dive back in here. It feels like you sat down with him and you had 67 tabs on the spreadsheet and multiple columns

attached to columns and his brain just went and he was like i can't even is that what happened yes so this is not about easy on the same page with you it's that his brain is kind of wired like mine and your brain is wired like george's and so you present that to george and george gets giddy you present that to me and i'm just saying the same thing. I'm like, nope, I'm going to be out here watching sports. And I think what I heard you say is that your husband said, just tell me, just tell me what's coming in, what's going out. I'm good with the budget. And if there's a couple of things we need to talk about, present those to him one by one, like sit down with him and forget the spreadsheet and just say hey um here's what i'm suggesting we do on our budget every month for groceries and it's really not going to affect the food we eat

he's going to go great you know what i mean like keep it high level but you do the nerdy part but as long as he has buy-in to the overall numbers i think i'm okay with it george am i missing something yeah he doesn't have to live in these line items and numbers. He just has to make sure, hey, before I go buy the groceries, I'm going to check the EveryDollar budget to see, do we have the money? So simplify it for him. Are you guys using EveryDollar right now? No, I have another app that is like an envelope system. So it's very similar, but it's not the exact same. Okay. Does he have this on his phone? He does. Okay. So he's got the login. He's signed in. He can see it all. Is it easily laid out?

Again, it's just all those categories that really... Well, do you have too many categories? Are you splitting this up in a way that is overwhelming? I probably have 18 categories. Oh my gosh. Well, yeah, that sounds reasonable when you lay out what everything, you know, the electricity bills, the water bill. Right. Groceries, eating out, insurance bills. Ken is looking at me like I got 14 eyes right now, Brooke. So I think this is your husband.

This is actually playing out in real time. I think 18 is too many. Okay. Maybe I'm wrong. I think it's accurate. Really? Yeah. All right. I stay accurate. I probably have that or more. many. Okay. Maybe I'm wrong. I think it's accurate. Really? Yeah. All right.

I stay accurate. I probably have that or more. Yeah. Okay. I tried to simplify it, but I kind of went one time. Because you could lay out subscriptions and have them all, or some people list out Netflix is this much, who lose this much. And so when you add up everything in your life, there's more than 18 expenses.

All right. I'm backing off. This is a great example. I know. I'm getting the look from Kelly as well. I'm wrong, America, and I have no problem being wrong. It's where I usually live. So what is the big conversation right now when he comes to you and says, listen, I can't do it, and then he just never looked at it. And now we would do our budget meetings. He'd just kind of sit there, okay, that sounds good.

And I'm like, well, do you want to change anything? No. I'm like, okay. He has to change something. Part of the budget committee meeting is that the free spirit has to get involved and have a say. Because if he has some buy-in and he has some skin in the game, he'll be more likely to pay attention to it. So you have to force, that's part of the job of the free spirit is they have to have a vote. All right, let me speak on behalf of,

can I speak on behalf of all free spirits? Do it. All right. I think you need to pick a couple of things that he actually really naturally cares about. So let's ask, what are some things that he spends money on that he enjoys, Brooke? I'm not sure. um okay well now we have a real marriage problem here you don't know what your husband likes to spend money on i mean when he because we we've had our spending down to we had at first at ten dollars a week now he got 15 and so whenever he does spend his money it's normally at a gas station for like snacks or something okay okay he's a man of simple pleasures i get it let's just snap into a slim jim and a red bull and he's good to go okay all right so he has no hobbies at all he doesn't spend money on hobbies no okay well um i backed myself

into a corner on this little example okay so let's take the snacks i what falls under eating out, right, George? Restaurants? Yeah, what is your line item for those kinds of things? For eating out, we have $25 a week. We normally go out on Saturday nights as a family. Okay. Is this connected to your bank account? Do the transactions just pop up and you drag them? It's not connected to the bank account, but I do it myself. I do it manually. Okay. There's one reason. He's not going to the bank account but i do connect like i i do it myself i do it manually okay there's one reason he's not going to go enter the stuff manually so what are you really asking of him here what am i asking yeah what are you asking of him to do on a daily or weekly basis that will keep you guys on track um i don't know i think i probably just want the emotional support more than anything i want to

make sure that i'm making the right right right decisions so this has nothing to do with the actual tactics of the budget you just don't feel like he's bought in emotionally and i think you need you guys need to have a new conversation where you share your feelings here's how i'm feeling how are you feeling and he's going to say listen truly i just don't care as much about this as you do but there's not a whole lot to care about, too. You're tracking transactions. You guys are living really tight right now trying to get out of debt. You see what I'm saying? The guy's most exciting line item is if he gets a Diet Dr. Pepper and a Slim Jim. We need to live a little more. What are your actual goals? Are you guys trying to get out of debt right now? Yeah. So we have about $17,000

in debt. What kind of debt? So I have our personal loan, which means people that we owe is $1,000, medical $4,000, credit card $3,600, and our vehicle, our van $8,000. Okay. And he's bought in that we're going to get out of debt aggressively? Yeah, I think so. Okay. That, to me, is the major piece. The actual, you know, how the budget gets laid out and the transactions, it's okay if he's not sitting there, you know, as involved as you are. Really quick question here.

Is he spending money that you did not budget and you're going, hey? Is he blowing the budget? Is he blowing it up? Occasionally. He bought $200 boots the other month, and I had not budgeted for that, so we had to catch that up. And he didn't say, hey, can I buy these boots? He didn't have a conversation about it? Yeah, we talked about it, and what happened was it's his old boots completely, like, I think the sole came off or something, so it was like something we had to get.

No, you didn't. I am Mr. Resoling Shoes, am I not, George? Ken can keep a shoe alive longer than it should be alive. I should make you ship those boots to me. I'll pay for the soles, ship them back to you with some shoe polish. The guy won't know what hit him and return the other boots. Here's what's going on. This whole conversation changed. You've been telling George and I that he's basically on board and he just doesn't like the budget process, but he's not on board. If he's guilting you into a $200 boot purchase, that's a different story. When you guys are saving $25 to go out to eat as a family, I don't even know how you do that.

I guess it is Iowa, but still. Oh, boy. Well, how about this, Brooke? Try out every dollar premium. I'll gift it to you. Would you try it with him? That has to happen. Maybe that'll trick his brain, and it's so much prettier than probably the budget you're using.

It's simple to plan spending, track your expenses, save for what matters most to you. It's going to help you keep a pulse, get him on board. So check out EveryDollar for free, everyone listening, in the App Store or Google Play. And, Brooke, because I like you, you're going to get EveryDollar Premium. Hang on the line. Christian will pick up, and we'll get that over to you. By the way, could have resold those boots. I'm going to say 40 bucks. Some shoe polish will cost you five. 45 bucks. You got a brand new pair of boots. Brand new boots. And I'm not exaggerating. I should do a video on the YouTube channel, how to refurbish your boots or George. I'd watch it. This is the Ramsey Show.

This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie. In our self-obsessed society, we're obsessed about our own diets, our own workout routines, our own jobs, our own social media feeds, everything. It's easy to forget that no one can do life alone. And I don't care if you're an introvert, an extrovert, or whatever you want to call yourself, we all have to have a community and a support system to do life with. It's time to shift the focus from doing it all by ourselves to knowing that we can only be well and whole when we ask for help. Therapy can be a great source of help and support for any area of your life. And if you're thinking about starting therapy, try BetterHelp. BetterHelp is 100% online therapy,

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George, what are you hearing about the real estate market these days? Oh, boy. Well, there's sort of a standstill here. People are waiting with bated breath on the sidelines, hoping the Fed fixes the interest rates. But as we know, if the interest rates shoot down, home values are going to spike up. And so it doesn't solve a lot of problems for the housing market. And so we always tell people, buy when you're financially ready, marry the house, date the rate. Love that. Well, the best way to do that, by the way, is to use our Ramsey Trusted Program to find a real estate agent that you can trust, who's going to help you make a really good decision based on

the financial formulas that we teach here at Ramsey Solutions. So we've got just an unbelievable army of top agents in your area. All you got to do is go to ramseysolutions.com slash agent and interview some people, you know, talk to multiple agents and make sure you've got a good connection with them. These Ramsey Trusted Real Estate Agents have years of experience and are going to help you make good decisions on pricing, marketing, making, choosing the right offer. So this is also if you want to sell your house. So do it with a really, really trusted agent, ramsaysolutions.com slash agent. All right, let's go to Charlotte, North Carolina, where David is joining us. David, how can we help? Hey, guys. Good afternoon. Thank you for taking the call. It's a privilege to speak to you today.

All right. My wife and I are in baby steps four, five, and six. We both have really good full-time white-collar jobs that we love, making good money. And we launched our second side hustle last year that has just been growing incredibly fast. We're going to double sales this year from last year. And I guess my question is, we're rolling and we've been rolling for about 18 months now, 100% of our small business profits back into the business because we're able to live off of our full-time income from our day jobs. When is the right time to start pulling out profits to hack away at our mortgage versus continuing to grow the business at, like I said, a pretty aggressive rate? It feels like it's not a math problem, but I know emotionally it's hard to make this decision.

Well, the IRS is going to consider all of this income. So what is your total household income with the side hustle? So last year, household income was $310 with the side hustle. Amazing. This year, it's going to be closer to $410 because the business has doubled. Woo! Way to go. What is the business?

It's an online retail store. It's kind of a niche hobby similar to Paintball called Airsoft. I just found some products that I'm able to import, and I've kind of customized them, selling them to the U.S. market, getting a really good margin,

and then every penny we make, we're rolling back into new products to expand the offering, essentially. So I have more ideas than capital. So rolling money back in to grow is really easy, but at some point I feel like we need to start getting some value for our nights and weekends we've been putting away. Yeah. I would definitely strip a portion of this away and go, this is going to be income that we're going to use to pay off the house, to invest more, to max out. I mean, you guys have already able to, and hopefully are, maxing out all of your retirement options, right? We are, yes.

Okay. So you got the 401ks, if you have those, backdoor Roth IRAs, maxing out an HSA, if you have access to a health savings account. We are, yes, sir. And then beyond that, I would be attacking the house. So what if we said, hey, every 30% of our side hustle revenue, we're going to use to attack the mortgage and just put a number on it that you guys agree on? Yeah, we could definitely do that. What's left on the mortgage? 228.

I think this thing is gone in the next 12 months. Is that fair? That would be 12 to 13K a month. Oh, I don't know. It's possible. That would be tight though. If we did 10K a month, that would be 18 months to pay it off. I haven't done the math on one year payoff, but that would be tight. Yeah. We'll set a goal and say 10K a month. And so on top of our normal income from our full-time jobs, we're going to pull whatever we need to hit that $10K goal. And that will set you guys on a path to where you don't have a flat tire,

where you're doing multiple things at once. I want you also to give more and to spend some of this money. It doesn't always have to be about the investing or pay down goal. And just see where this goes. Is this something you want to do full-time one day? Yeah, that was kind of the follow-up question. When, when do we, uh, get to get our nights and weekends back? Is there a, I would, I mean, if this is something you can teach someone else to do, hire a team member to run the online store and you pay, you know, if, if this thing can make

200 grand a year and you pay someone 75 grand a year to run it, it's still a good deal for you. Yeah, that's absolutely true. So if it's something you want to get your time back, I would hire someone else to do it. If it's not something you're going to go jump and do full time instead of your day job. Ken, what do you think about this?

When is the time to, it doesn't sound like you want to take this to be your 40 hour a week job. You like doing this as a side hustle. You'd rather someone else run it and you guys reap some benefit. Is that correct? I think I'd rather do this. I'm just a little anxious about the risk. Okay. So what do you think the risk is? What's the biggest risk that you're kind of worried about? I think the biggest risk would be everything is coming from the region of Taiwan and China that would be complete. My business would close tomorrow if we went to war or if there was any sort of

global crisis versus my day job is stable. Okay. So. A little upside, but stable. Right. All right. So that's legit, but that's kind of tied to this thing. There's never a time where that risk isn't going to be there. Fair? Yeah, correct. Could you find a different manufacturer and start to go, hey, this would be a backup option if things blew up with this area. I could get manufacturing done here.

It's going to be X, Y, Z, more expensive. It would cut into our margins a little bit, but we could still make it work. Yeah, that's a great idea. We've been trying to expand our manufacturing. So we are in three countries now, but all of them are in that region from a cost perspective. So that's a good point. Even having a small operation somewhere else we can ramp up in an emergency situation would be very valuable. So I'm glad we went down this road, George, because that's my answer to your question. What do I think about what I think you've got to have a backup plan before you leave the day job.

Because – or let me say this. If you can quickly get a backup plan in place – because you need a backup plan. It's the idea, not an idea. The idea. I think you are putting yourself in dire straits to have all of your manufacturing coming from that part of the world. That is – I don't think that's alarmist in any way. I pay attention to this stuff all the time and everything I'm reading. I think you have a legitimate concern there. And I think if we learned anything, small businesses that rely on manufacturing, if we learned anything about the pandemic, it is good business to try to figure out a way to get stuff manufactured in the U.S. Does it cost

more? Yes. But is it more stable in the long run? I would say yes to that. And so I think that is the idea because I think that's the biggest risk to your business, whether you're working full-time in it or you're in the day job, dream job scenario, which is where you're at now, correct? Yeah. Yep. But I would say one other thing. I always give this advice.

This risk needs to be taken care of, but I would be comfortable if I were you moving from the day job to the dream job if you have 12 months of your salary in retained earnings sitting in the bank. So having a big cash position and getting your mortgage paid off is going to reduce your risk. That also helps. Lower your expenses. So maybe I'm patient, George. Maybe I pay the mortgage off, then get retained earnings earmarked with 12 months of David's salary. You see what I'm going

with? See what I'm doing that, David? I want you having your salary totally in the bank so that we got 12 months, and hopefully you don't have to use it, but it's there. And then see, is the business sustainable? Does it continue to grow? Is it shrinking based on market demand and the economy? You'll learn a lot over the next year or two as you continue down that path. Yeah, we're still really young. So that's a really good advice because we don't need to

rush into this. And that time building up a nest egg would be beneficial from us understanding where we're at as well. Yeah, that's really wise. Talking about sleeping well at night as you move from, listen, you don't want the dream to ever become a nightmare. And when there's so much pressure just to provide for you on a business, it just changes everything. So I like the position you're in. I'd wait to get the house paid off. I'd wait to get the retained earnings up to a point where you had your salary and I would get a manufacturing fix in the books. And I think if you do that, George and David,

I think I feel really good about moving over full-time. Amazing. It's an inspiring story, though. Safety first. Put a helmet on, right? Don't move. Quick break. We'll be right back.

This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me. The phone number is 888-825-5225. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me. The phone number is 888-825-5225. 888-825-5225. Our scripture of the day comes from Psalm 25, 21.

May integrity and uprightness protect me because my hope, Lord, is in you. Our quote of the day from Abraham Lincoln. George, he was one of our former presidents. I've heard of him. 16th president. saw a tweet from about him the other day you have to do your own growing no matter how tall your grandfather was oh i like that and abe was a tall fella he was wonder how tall his grandfather was that begs the question it's a very good question you can look at both of us and tell that our grandfathers weren't tall. Stout. Stout people? They were stout folks. It's good to be with you, my friend. All right, let's go to Virginia, not to be confused with where she's from, Reno. All right, Virginia, how can we help?

Hi, thanks for answering my question, hopefully. My husband recently passed away about two months ago. Oh, my gosh. What happened? He actually got cancer. Oh, I'm sorry. How old was he? Unfortunately, he was only 40.

Oh, my goodness, Virginia. That's heartbreaking. Oh, wow. How recent was this? He passed a little over two months ago. How have you been doing? Do you have good support, community? Yeah, my children, yeah, I've been really lucky. My children are very supportive, and my husband and me had some financial plans set in place. So, you know, I'm on the fortunate side of the situation afterwards.

So I'm very lucky we could plan for, you know, bad things. Yeah. How can we help today? Yeah. Well, so I don't have very much debt. I only have student loan in my name, but I did get, in my opinion, substantial life insurance. But I'm just confused about what I should do going forward. If I should get a home, because currently I'm a renter, or if I should invest it.

I'm not really sure which to do. I don't make a lot of money, but I'm able to keep my current bills are handled. I make enough to cover, you know, my cost of living. So I don't really need this money to pay bills or anything. So I just want to make the best choices. Can you run the numbers for us? So tell us about the cost of the, excuse me, the amount of the student loan and then the life insurance payoff. Okay. So the life insurance is $125,000, which I've already received. I have not spent any of it. And then I have a $36,000 student loan. And what is your income? My income right now, my income has not been substantial for the last few

years because my husband made decent money and we were able to just live on his money. We have four children. They're all older. Three are adults and one under 18. So I'm sorry. I lost track of what I was talking about. I was just curious what your income is or what you think it can be. My income is at about $35,000 to $40,000,

but that's going to be a lot more when I start putting myself toward my business a little more. I'm a QuickBooks bookkeeper. I do small business. Oh, okay. So you're kind of doing this part-time? I've been doing it part-time, but my plan is as soon as I get things a little more organized and calm, I will be working full time. We used the savings when he was sick.

So we had enough savings to pay the rent and the bills for about six months, and that will be covered until the end of the summer. So how much do you have right now in the bank? In the bank? About $8,000. Well, I have the $125,000 split between two accounts, but I have about $8,000 other than that. Okay. So first things first, I would get rid of the student loan debt.

Knock that out. Then leave enough to have six months in your emergency fund of expenses. So add up what your expenses are for a month. Let's say it's $4,000. Well, then we need $24,000 in that savings account protecting us from life. So we never go into debt again. So if we do that, you got $125,000 plus $8,000, right? Yes. Minus your student loans, which is $36,000. That leaves you with $97,000. And let's call it $25,000 for your fully funded emergency fund. That leaves you with $72,000 leaves you with 97, and let's call it 25 for your fully funded emergency fund,

that leaves you with 72,000 to play with. Correct? Yes. That could be, if I were in your shoes, I would probably want to get into a home and have a fixed expense versus rent continuing to go up, and then work on paying off that house over time. So I would, the point of life insurance is to replace income if someone were to pass away. Now, in this case, he truly didn't have enough. We recommend 10 to 12 times their annual income. Right. So this money is not going to really replace his income because the point is you would

invest that money, it would create a return. And from that return, you could pull from to, you know, replace the income. So in this case, you may be better off getting rid of the debt getting basically getting yourself in a better financial position and using your own income to begin investing because you're younger you have time to do that okay how old are you my only concern i'm 45 okay my only concern with that is the housing market where i live is really bad. For an average house, it's about $550,000. Okay. And I can't justify not only not buying that, like I'm two people, three people right now. Well, soon you'll be down to one. Will it just be you in a few years? Yeah. Yeah, it'll just be me. So why don't we just

keep this money saved, the 72, in a high-yield savings account, and you can check out our friends at Laurel Road. They've partnered with my YouTube channel. They've got 5.15% APY. So your money will at least grow at that rate currently, and it'll keep your money safe, liquid, and it'll be growing for you. And beyond that, keep adding to that with your future income because once you're out of debt, you've freed up a student loan payment.

So with that, plus keeping your expenses low, use the extra margin to start saving up more for that down payment. And maybe you get a condo further out of your area for $250,000 or $300,000. Because you don't need all the space. That's what I was thinking. Right, right.

And I don't want to have all that space either. It's just a lot of cost that I don't need. Exactly. So you don't have to go buy a $600,000 house just because that's the going market in your area. So that's what I would do. That's your next few steps and start to build a life for Virginia and what that looks like. Okay, great. And I'm going to send you a copy of Dave's book, Real Estate the Ramsey Way, to help you make the right choice. And that'll be maybe a few years out from now, you'll be a homeowner. And one day that house will be paid off. And I want you to be investing

15% of your income once you get the debt paid off and have the emergency fund. And that's going to allow you to build some serious wealth from 45 to 65. You know, you do 20 years of investing into, you know, if you're a solopreneur, look into a solo 401k or a SEP IRA or even a traditional Roth IRA. You can invest in those regardless of your employment as long as you have income. So fully funding those over time, you're going to be doing just fine, Virginia. Again, I'm so sorry for your loss. This is not how you plan to spend the next 20 years. No, it wasn't.

Right, it wasn't how we planned. We planned on stockpiling money for the next 20 years so we could retire a little bit early and, you know, have some time. Yeah. Well, like our friend John Deloney would say, we've got to grieve what happened and then create a new picture of what life's going to look like here on out. We do, yes.

Yeah. Well, we're rooting for you, Virginia. Hang on the line. We're going to get you that resource and stay with it. You've got some cushion, so no need to be panicked and work on that healing and then make those big decisions. Never want to make big financial decisions, George, in the shadows of a big loss like this. Oh, absolutely. And a good reminder for those to get life insurance in place if you have anyone that depends on your income. So if you're married, you got kids, get life insurance in place if you have anyone that depends on your income. So if you're married, you got kids, get life insurance in place. Term life is the one you want. 10 to 12 times your

annual income. So if you make a hundred thousand, you want a million or 1.2 million in coverage. That doesn't mean that's what you pay. You're going to pay a very small portion of that. Yeah. I think people are shocked at how affordable it is. And then, you know, especially when you start getting kids involved. Yes. I just, you know, I remember going, oh boy. The peace of mind that life insurance gives me is incredible. So go to Zander.com. They are our trusted partner when it comes to all things insurance, especially life insurance.

That's who I have mine through. Me too. My wife Whitney's got mine, got her own policy. And it's something you don't want to think about, but it takes a few minutes to log on there and get the quote and get it done. But, man, peace of mind. Little tip I always love to give when we talk about this to guys, prepare for about six weeks before that.

Get in really good shape as far as your food, your – Oh, yeah. Drop some weight. You want to get that cholesterol low to get that premium rate. Amen. I worked hard for that, pal. I can tell. And I immediately went and got a cheeseburger as soon as the blood exam was over.

All right, we're going to get out of here. Thanks to Kelly Daniel for keeping us on the air. This is The Ramsey Show. Thank you.